More Local Governments May Override Tax Cap in Year Two

ALBANY - About 25 percent of New York's local governments have indicated that they may override the property-tax cap in 2013 - up from 19 percent at this same time last year, state data shows.

Municipal officials said the overrides are the result of a squeeze on their budgets. Some counties, towns and villages are overriding the cap as a precaution to ensure they are not penalized if they accidentally exceed their tax limit.

"Basically, it's so difficult on how to come to that figure on the tax cap, you almost have to override it to protect yourself as a town," said Dewey Decker, supervisor of the town of Sanford, Broome County.

About 1,575 taxing entities in New York, including fire districts and libraries, had filed their cap plans with the state Comptroller's Office as of Thursday, or 58 percent of them. Of those, 387 said they planned an override, Gannett Albany Bureau's review of the data showed. The governments run on a fiscal year that starts Jan. 1.

Locally, there are eight government entities in Putnam, 17 in Rockland and 33 in Westchester that have indicated they may override the cap on the property-tax levy. That includes Putnam and Rockland county governments but not Westchester County.

In Putnam, four towns - Carmel, Patterson, Philipstown and Southeast - and the Carmel, Kent No. 1 and Philipstown-North Highlands fire districts are seeking to override the cap.

In Rockland, four towns - Clarkstown, Haverstraw, Orangetown and Stony Point - three villages - Airmont, Montebello and Sloatsburg - six fire districts and three libraries have proposed going over the cap.

In Westchester, two cities - New Rochelle and Peekskill - three towns - Bedford, Mount Pleasant and Scarsdale - 24 fire districts, three libraries and one improvement district may override the cap.

Gov. Andrew Cuomo has hailed the tax cap adopted last year as a way to control New York's property taxes, among the highest in the nation. The cap limits growth in the tax levy to 2 percent a year or the rate of inflation, whichever is lower. It has been 2 percent the last two years.

In the cap's first year, 81 percent of local governments and 95 percent of school districts stayed within the tax limit. Cuomo said in a September report that the 2 percent tax increase was 40 percent less than the previous 10-year average.

"It is clear that the property-tax cap has been a tremendous success, saving hard-earned money for New York families while ensuring that local governments learn to do more with less," Cuomo said in a statement at the time.

Local governments said staying under the cap is increasingly difficult. There are also exemptions to the cap, which not only complicates their calculations, but also leads to confusion among the public.

For example, schools averaged a 3 percent tax-levy-cap limit last May because of cap exemptions, such as rising pension costs. If an entity inadvertently exceeds the cap, they would be penalized the difference in the following year's budget.

Joe Mareane, the Tompkins County administrator, said the cap is "almost impossibly complex." The county legislature this year overrode the cap as a safeguard and ended up staying within its 3.69 percent limit. It overrode the cap in 2011 too.

"Their goal has been to keep the levy within the cap, but they also have understood that there are essential programs that we have to deliver," Mareane said.

A local government can override the cap easier than a school district can. Sixty percent of a governing board needs to approve an override. For towns with a five-member board, that's a simple majority of three votes.

For schools, 60 percent of voters need to approve an override. Last May, 24 school budgets were rejected - 19 were for overrides.

Cuomo's office said the latest numbers are preliminary and not a clear reflection of the cap's success. Many governments have yet to finalize budgets for the new year.

"As we saw last year, many local governments who said they were going to pierce the cap ended up within it once their final budgets were approved," said Cuomo spokesman Richard Azzopardi. "While this data is primary in nature, last year's final numbers definitively show that the tax cap worked to reduce property-tax increases and give taxpayers the relief they need."

Some governments, such as those of Republican county executives in Monroe and Westchester counties, have pledged not to raise taxes. Others said they support the tax cap and are working to stay under it.

Twenty-two of 33 counties that had reported to the state indicated they would stay under the tax cap, including Dutchess, Broome and Chemung.

"Our focus is on the most efficient delivery of core county services, balancing the expectations of our stakeholders while limiting the burden on our taxpayers," Dutchess County Executive Marcus Molinaro said in his Nov. 5 budget presentation.

Some local governments said the cap is untenable. County leaders said the cap criteria also changed this year. County sales-tax revenue shared with other governments is calculated in the cap limit, which has impacted counties' ability to stay under it.

"Every year the governor's office and the comptroller seem to come up with a new way to change the cap to make it more difficult for people to comply," said Mark Alger, the Steuben County administrator.

Municipalities are pushing the state to alleviate the cost of some unfunded state mandates. Expenses for the 57 counties outside New York City will outpace revenue by $4 billion over the next decade, the state Association of Counties estimated.

"We have to bend the cost curve on the mandates," said Stephen Acquario, the association's executive director.

The state has taken steps to help. Over the next three years, the state will take over counties' growth in Medicaid costs, a savings of $1.2 billion. It also implemented a less generous pension tier for new public workers.

Some local officials said the savings, though, are not providing immediate help.

Rockland County Executive C. Scott Vanderhoef has proposed to exceed the cap and raise taxes 18 percent, which would bring in $1.6 million in new revenue. Yet the cost of mandated programs is increasing $33 million, about half of which is for pension expenses.

"If you face $33 million, you have to raise property taxes," Vanderhoef said.